This article investigates the impact of ego development on the course of psychiatric illness in a group of 37 psychiatrically hospitalized adolescents ages 12 to 16. The subjects, 21 males and 16 females, were evaluated at time of admission and again after 9 months of hospitalization. Using the Loevinger Sentence Completion Test (Loevinger, Wessler, & Redmore, 1970), two ego pathway groups were defined: progressors, those subjects who had advanced at least one-half stage in ego development, and nonprogressors, those who did not progress at least one-half state in ego development. Significant differences in clinical course were found between the two groups. Progressors demonstrated more significant decreases in psychiatric symptoms as measured by the Achenbach and Edelbrock (1987) Youth Self Report and had a significant change in their use of coping and defense processes compared with the nonprogressors. The findings are discussed in the context of a constructivist approach to developmental psychopathology.